In 2018, Magic Table Inc

Multiple Choice

In 2018, Magic Table Inc. decides to add a 36-month warranty on its new product sales. Warranty costs are tax deductible when claims are settled. In its financial statements for 2018, Magic Table Inc incurs:

A) An increase in a deferred tax asset.
B) A decrease in a deferred tax asset.
C) An increase in a deferred tax liability.
D) A decrease in a deferred tax liability.